Hazardous Substance Labeling vs. Trade Secret Protection

Chemical manufacturers in Taiwan are concerned that new rules requiring the disclosure of hazardous substances in their products could compromise confidential business information (CBI).

In November 2018, the Ministry of Labor (MOL) published an amendment to the Regulations for the Labeling and Hazard Communication of Hazardous Chemicals that requires disclosure of the substance’s Chemical Abstract Service (CAS) number unless an application to withhold the number has been approved. At the same time, the amendment restricts eligibility to apply for such waivers. Under the amendment, if the substances are listed in the Standards of Permissible Exposure Limits at Job Site, then they cannot be considered CBI.

Industry veterans say that the government’s intention is reasonable – to make public the hazardous substances in chemicals to ensure better worker safety – but that the new regulation may do more harm than good.

As a safety measure, knowing the exact chemical name of every hazardous substance in a product doesn’t necessarily improve working conditions. As long as the proper protective equipment is worn and the substances are handled with proper caution, workers’ safety should be ensured, industry representatives say.

From the standpoint of manufacturers, disclosing trade secrets could harm the competitiveness of Taiwan’s chemical industry, says Kenny Jeng, product stewardship and regulatory leader of DuPont Taiwan. “This disclosure requirement doesn’t exist in many other Asian countries,” he says. “If this information is in the public domain, it would be possible for our competitors to reverse engineer our products.”

Another problem with the regulation is that not all chemical manufacturers have the resources to comply with the requirements. “Some SMEs just lack the capability to do a detailed safety data sheet (SDS),” Jeng says.

In AmCham Taipei’s 2019 Taiwan White Paper, the Chemicals Manufacturers Committee called for special treatment for chemicals used for R&D purposes. It suggested that such materials be allowed to be identified only by the generic name of the hazardous substances, provided that product hazards are classified properly and noted on the SDS. This system would be similar to that adopted by the European Chemical Agency (ECHA).

That solution would be a boon for Taiwan’s semiconductor sector, one of the nation’s most important industries, Jeng says. Without an R&D exemption, IC makers’ product development may be impaired, given the time it takes to apply for CBI, he adds.

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